Daiichi to give technical assistance to Ranbaxy to meet USFDA norms

Written by fe Bureau | New Delhi | Updated: Dec 20 2013, 10:13am hrs
Japan pharmaceutical major Daiichi Sankyo, promoters of Ranbaxy Laboratories, is keen on upgrading good manufacturing practices at the Indian companys domestic plants, which were hit by US Food and Drug Administrations quality sanctions.

Daiichi Sankyo president and CEO George Nakayama on Thursday met commerce and industry minister Anand Sharma to discuss the companys India plans. During the meeting, Nakayama said the company will give technical assistance to Ranbaxy to comply with USFDA norms, according to a commerce ministry official.

The USFDA has placed an import ban on all three Ranbaxys Paonta Sahib, Dewas and Mohali plans, which are dedicated to the US market that accounts for more than 40% of the companys sales.

Nakayama assured Sharma of Daiichis continued engagement with India and said the company intended to expand its operations. He added that they benefited greatly from the tie-up with Ranbaxy as it helped the Japanese company diversify its presence and penetrate new markets.

Daiichi, which owns a controlling stake in Ranbaxy, plans to focus on reviving the companys plant in Mohali, which was banned from exporting medicines to the American market for not adhering to good manufacturing practices in September.

In 2008, soon after Daiichi coughed up $4.6 billion for its stake in Ranbaxy, import alerts were triggered against exports from two other plants in Dewas and Paonta Sahib, following which, exports were banned.

In May this year, Ranbaxy admitted that it had falsified data while seeking approvals from USFDA, and paid $500 million to settle the matter with the US department of justice. Apart from the crippling financial burden (Ranbaxy reported a loss of R976 crore in the last two quarters, against a profit of R220 crore in the same six-month period last year). The settlement also lead to a loss of face for the generics player that has global ambitions.

Close on the heels of the legal settlement, the USFDA issued an import alert on drugs made at Ranbaxys Mohali plant on September 16. In a statement, issued thereafter, Daiichi said it will work with the USFDA to resolve all quality-related issues that resulted in an import ban imposed on Ranbaxys Mohali plant taking any and all necessary steps to resolve their concerns.

Meanwhile, Daiichi-Ranbaxy is exploring territorial synergies, which entails that in certain geographies where Ranbaxy is present and is reasonably strong, it will take Daiichi Sankyo products to the market and vice-versa.